If you’re raising a teenager, you’re likely going through a challenging yet rewarding roller coaster of a ride. Everything becomes more complicated – the conversations you have, the lessons you teach – and it’s no different when it comes to discussions about money.
Until now, the conversation about money has likely involved your money, and whether or not you were going to spend it on something your child wanted. But along with questionable fashion choices, foreign (to you) slang words, and dramatic adventures in acne, the teen years also usher in your kid’s first forays into earning an income from summer or part-time jobs.
While your teenager is stretching their limits to take on these new challenges and enjoy new freedoms, they may also be picking up less-than-desirable money habits: overspending, poor purchase decisions, questionable credit card use, and a general lack of planning. Changing these habits to instil good financial instincts can make a major difference in their lives to come.
How are your money management skills?
Before you can help your son or daughter, you may need to become more knowledgeable about specific investments or money matters yourself. Expand your financial know-how.
While there’s value in learning from mistakes, the money habits your children pick up could end up impacting you: 42% of Canadians aged 20 to 29 (that’s 1.8 million young adults) live in their parents’ homes, and the top reasons behind it are financial.
If you’re looking forward to being an empty nester before you retire and you’d like to help your kid stand on their own financial feet, now is the time to get involved. Weaning your teen off harmful habits relies partly on understanding your child and his or her motivations, which only you can do. But you will also need specific knowledge about good money management.
8 recommendations to help you transition your teen to a money-mature adult who is capable and competent at handling their finances
|If your teen…||Recommend that they…|
|1. Has no awareness of his/her money personality||Get to know it through the #1 Universal Truth about money|
|2. Doesn’t know how to plan or budgetBudget A monthly or yearly estimated plan for spending and saving. You work it out based on your income and expenses.+ read full definition||Learn money management basics|
|3. Overspends his/her monthly allowance||Play The Cranial Cash Clash: Gift Thrift|
|4. Doesn’t have or know how to use a savings accountSavings account A bank account intended for depositing funds. Pays interest and lets you withdraw cash at any time.+ read full definition||Get a complete intro to bank accounts|
|5. Is careless in using his/her credit cards||Learn how to manage debt of all types|
|6. Hasn’t thought about saving for a higher education||Read about the realities of paying for an education|
|7. Has never done the math when it comes to using money||Check out and try these tools and calculators|
|8. May be too trusting and vulnerable to scams||Be able to recognize and avoid financial fraud|
80% of moms let their teenagers make their own purchase decisions.
Source: Mom Central Consulting, Trend Report, July 2013